Discuss the following statement. \'The probability of event E is considered \"su

Question

Discuss the following statement. 'The probability of event E is considered "subjective" if two rational persons A and B can assign unequal probabilities to E, Pt a(E) and Pr/j(S). These probabilities can also be interpreted as "conditional": where I a and In represent the knowledge available to persons A and B, respectively. Apply this idea to the following examples: The probability that a '6' appears when a fair die is rolled, where A observes the outcome of the die roll and B does not. The probability that Brazil wins the next World Cup, where A is ignorant of soccer and B is a knowledgeable sports fan.

Explanation / Answer

a)

As A has seen the first die roll, he may start thinking that that result could be more probable than the other results. However, B still thinks that the die is fair. Hence, they could assign different subjective probabilities to having a 6.

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b)

A may think that all teams have the same chance of winning, but B knows what the strong teams are based on their records and the current roster. Hence, B may assign a different probability to the event that Brazil will win the next world cup than A.

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